Two Minutes Reading with the Masters of Investing
Most investors think getting rich in the stock market means finding the next hot stock. Charles D. Ellis—(we just shared his “
” yesterday)—one of the most respected voices on Wall Street, says the opposite: the secret is to do less, stay calm, and keep investing.
Ellis, who has advised billion-dollar funds and written classics like Winning the Loser’s Game, believes long-term investors should treat investing like running a marathon—not a sprint.
1. Don’t Try Too Hard 🚦
Ellis argues that most investors lose because they try too hard to “beat the market.” It’s like running the Indy 500: finishing is already tough—why risk crashing by being too aggressive?
Instead, focus on not losing money through emotional mistakes. A bad panic-driven sell can hurt you more than a missed opportunity.
2. Stay Rational When Others Panic 🧊
“When stocks get cheaper, how can that not be good news?” Ellis reminds us. It sounds obvious, but during market crashes (like 2008 or even the 2020 pandemic), fear makes most people sell. The better move? If you can, buy when prices fall—you’re getting assets on sale.
3. Index Funds Are Your Best Ally 📊
Ellis believed most people should simply buy index funds. Why? Because 90% of professional money managers fail to beat the market after fees and taxes. By owning an index fund, you own the winners and avoid paying high costs.
For example: if you invested in an S&P 500 index fund 20 years ago and just held, you would have done better than most expensive mutual funds.
4. Benign Neglect is Powerful 🌱
Ellis’s favorite advice is “benign neglect.” Translation: once you set up your investments, leave them alone. Constantly trading or checking prices leads to mistakes. Just keep contributing regularly and let time do the compounding.
Think of it like planting a tree—you don’t dig it up every week to check the roots. You water it, then wait.
Why This Matters for You
The stock market rewards patience, not excitement. If you:
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Keep costs low
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Buy broad index funds
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Stay calm when markets fall
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Let time work for you
…you’re already ahead of most investors.
Ellis’s wisdom is simple but timeless: don’t try to outsmart the market—outlast it.
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